26 March 2024
Anticipation
In March 2024, the US bond yield curve remained inverted, albeit less steeply, following signals from The Fed indicating potential rate cuts up to three times within the year. This development has fostered a positive sentiment in the bond market, as ongoing speculation about rate cuts by the Fed could create an opportunity for investors, leading to further declines in bond yields. Although US inflation may still encounter challenges, it appears to be on a downward trend, which indicates progress.
Meanwhile, discussions within the domestic market revolve around the government’s proposal to increase the Value Added Tax (VAT or PPN) by 1%, from 11% to 12% in the upcoming year. While this could potentially push domestic inflation higher, it is expected to remain within the range of 3% to 4%, ensuring that real yields remain in positive territory. The execution of the VAT rate hike is contingent upon the overall domestic economic conditions, particularly the strength of purchasing power. If purchasing power remains soft, it is unlikely that the government will proceed with the plan.
Currently, investors are closely monitoring The Fed’s decisions, as they could significantly impact global bond markets, prompting investors to consider when to adopt a more aggressive stance. The yield spread between US Treasury and IndoGB bonds is anticipated to remain at the current level of approximately 250 basis points, reflecting the new normal. In the event of any fluctuations in US economic data causing corrections in bond yields, investors are advised to seize the opportunity to increase their holdings of fixed-income assets.
Product Recommendation
| FIXED INCOME FUND | |
|---|---|
| MIDU | MIDU invests in Bond Instruments with a Medium-Term segment and is categorized as low to medium risk. Investors bear the risk associated with the Bond Portfolio. |
| IDAMAN | IDAMAN invests in Indonesian Government USD Bonds with a short duration and is categorized as medium risk. Investors bear the risk associated with the Bond Portfolio. |
| MIDO2 |
MIDO2 invests in Indonesian Government Rupiah Bonds with a long duration and is categorized as high risk. Investors bear the risk associated with the Bond Portfolio. |
For More Information
Contact Mandiri Investasi – (021) 526 3505
Mandiri Investasi Whatsapp – 0816 86 0003
Mandiri Investasi Email – [email protected]
Mandiri Investasi Website – www.mandiri-investasi.co.id
Moinves Website – www.moinves.co.id
DISCLAIMER
The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
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